There is a green rush taking place in the United States, and the restaurant industry is not content to sit on the sidelines. Meanwhile, FDA regulation threatens to be one big buzz kill.
— Jennifer Parker
It’s après-ski hour in Aspen, Colorado, which means throngs of skiers are descending the white light slopes of Ajax Mountain in search of warming drinks and a wicked party.
Many head over to Hooch, a casual craft cocktail bar that resembles Laura Ingalls Wilder’s living room, if she were a progressive proponent of pot. (That’s no big deal here, given the fact that there are eight commercial cannabis dispensaries within walking distance, and it’s been legal to use marijuana recreationally in Colorado since 2012.) A bearded bartender named Cameron suggests a glass of the “Weed Tonic.” For $18, customers receive a mellow-yellow highball glass of Sipsmith gin, turmeric ginger syrup, and CBD bitters from a local Rocky Mountain brand called Strongwater.
For the uninitiated, CBD (cannabidiol) is a non-psychoactive chemical compound that cannot get you high. It is a naturally occuring extract from the hemp plant, often confused with marijuana because the same plant produces THC (tetrahydrocannabinol), the main active ingredient of cannabis.
Four bottles of the bitters sit proudly beside the bar’s best crystal coupe glasses. Given this cocktail’s markup is little more than 12 percent, CBD does more to affirm the bar’s laid-back identity than generate a significant revenue stream.
At fancier venues, revenue is a bigger factor. A few blocks away, the executive chef of the St. Regis Aspen, Laurent Pillard, is quietly working on a gourmet CBD tasting menu with the intention of serving it to guests at the hotel’s upscale restaurant, Velvet Buck. He just needs St. Regis executives to sign off on it.
If they do, Pillard will be the first chef to offer CBD at a hotel whose brand is part of Marriott International, a conservative company with a $41 billion market cap that also happens to be the world’s largest hotel company. (This is a big deal, even in Colorado.)
“Obviously there’s a [financial] upside, because you can charge more for CBD. But the guests are really feeling more rejuvenated after using it in our spa, and we have groups asking for CBD menus for private dinners. It’s what our guests want,” said Heather Steenge-Hart, the general manager of the St. Regis Aspen, who works closely with Chef Pillard. “We should go there, because we want to be ahead of the trend. You can’t just keep doing the same ol’ same ol’.”
Steenge-Hart’s stance is backed up by the heaps of cash generated downstairs at the St. Regis Aspen’s Remede Spa. Since the hotel started selling CBD products and massages in 2017, it has seen a 37 percent increase in gross revenues, according to records provided by Spa Director Irisha Steele. Within the first nine months of selling CBD, Steele made her company $100,000 dollars in additional revenue.
Spa treatments aren’t the same as fancy CBD cocktails, but those kinds of numbers are encouraging across the board. “It’s hard to project the food-and-beverage revenues that will come from CBD. But we’re willing to find out,” added Steenge-Hart.
Since the 2018 passage of the Federal Farm Bill, which officially separated hemp from marijuana and thereby legalized hemp consumption and its industrial production, CBD has proliferated on the menus of cafés, bakeries, restaurants, and hotel eateries across the country—while consumer sales figures steadily increase. This data has attracted both big name brands, including Soho House, Joe & the Juice, and The James Hotels, as well as lesser-known up-and-comers in Detroit, and Chicago.
“Hemp plants are cannabis plants that are grown with under 0.3 percent THC in the plant material,” explained Tisha Casida, CEO of That’s Natural, a CBD vendor based in Colorado which supplies the St. Regis Aspen with its own exclusive line of luxury CBD spa products, including muscle rubs, massage oils, and teas.
Modest, back-of-the-envelope calculations show high-end restaurants and bars charging 15 to 25 percent more to add CBD to their smoothies, lattés, cocktails, salad dressings, and ice creams.
If demand supports it, why not? In 2017, Americans and Canadians spent about $9.2 million on legal pot and related accessories, according to Arcview Market Research and BDS Analytics, which also finds that spending on legal cannabis worldwide is expected to hit $57 billion by 2027.
For many restaurateurs, that’s just too much to leave on the table.
The Birth of Hemp Haute-Cuisine
“It’s so new, we can’t yet gauge how profitable it will be,” said Los Angeles-based chef Andrea Drummer, co-founder of the catering business Elevation VIP Cooperative which serves cannabis and CBD-infused dinners for $200 to $500 per plate to a range of celebrities, including Chelsea Handler and Patricia Arquette.
Drummer, 47, is considered a culinary cannabis pioneer and entrepreneur. She’s known for creating the James Hotels’ in-room dining CBD tasting menu, and is currently planning to open one of the first licensed cannabis-selling restaurants in West Hollywood, titled Foray.
“It’s a really exciting project, because West Hollywood is the only city offering on-site consumption licenses to restaurants in the country. It puts us ahead of the game, when everyone is trying to feel their way around legalization,” added Drummer.
Overall, the playing field seems tipped in her favor. Ten U.S. states and Canada have legalized recreational use of marijuana, while 33 states have legalized medical marijuana, according to the national Marijuana Policy Project.
“When I first started out, I wasn’t a consumer of cannabis. I was a patient struggling with lower back pain and sciatica. I’m in California, so I could have just smoked!,” joked Drummer, laughing in spite of herself. “But, I’m a chef first — so I was making butter for a friend. On my first try, I creamed the butter and made ghee with ‘Blue Dream’ [cannabis]. It spoke to me like basil. The key is to tone down the effects of the THC, and make the flavor profile a little milder.”
Drummer’s three best selling CBD-infused dishes at the James Hotel include gourmet tater tots ($18), an ice cream vanilla-caramel sundae ($14), and spicy Italian meatballs ($32). Guest response has been positive, although there is less than a year of sales data to date.
For her part, Drummer thinks the world is ready for a new perspective on pot.
“I don’t doubt it’s going to work, but perceptions are still changing,” she said. “I gave a lot of food away trying to teach people: You don’t die! You won’t overdose on edibles! My niche, high-end brand has a lot of room to grow.”
Conflict and Controversy
If restaurants and bars aren’t serving CBD yet, that doesn’t mean they don’t want to. Those that are more cautious are either waiting for corporate legal team sign-offs, or are wary of new crack-down regulations, such as the ban on CBD additives in food and drink, just announced by the New York City Health Department.
As a result, popular vendors in New York City such as swanky high-rise midtown bar The Skylark are being forced to change their menus. The Skylark saw an increase in foot traffic from 300 to 500 covers a day since head bartender Johnny Swet began selling his $18 “Rocky Mountain High” cocktail last fall, according to general manager Justin Adams. The bar will have to cease serving the cocktail by July 1, 2019, or risk the health department confiscating its CBD supply.
The James Hotel Nomad is in the same boat. “As of last week the hotel proactively stopped serving the CBD menu due to the Health Department ban, sadly,” said communications director James La Russo. Previously, The James Hotel had been counting on the in-room CBD dining menu to contribute to the hotel’s RevPAR (revenue per available room) growth in 2019.
Still, New York City is not representative of the nation, and its ban is a conservative interpretation of the Food & Drug Administration’s (FDA) guidelines, which state: “It is a prohibited act to introduce or deliver for introduction into interstate commerce any food (including any animal food or feed) to which THC or CBD has been added.”
Whether the FDA will start punishing everyone selling CBD in food and beverages within their own state jurisdictions is unclear. To this, the FDA response is less than definitive: “The FDA may consult with its federal and state partners in making decisions about whether to initiate a federal enforcement action.”
This is not a risk worth taking for many restaurateurs, and opting out of CBD use is most common among businesses that don’t have the capital for in-house legal teams that can come to their defense. Even the lawyers acknowledge this uncertainty.
“Gray is an apt description. Wild West is another apt description,” said lawyer Richard S. Frazer, partner at Pryor Cashman, who spoke with Skift Table about CBD regulation shortly after New York City’s Health Department issued its ban in February. Based in Manhattan, Frazer represents chefs, food manufacturers, and independent restaurants, among other clients.
“The FDA is still determining the safety of CBD as a food or beverage additive,” Frazer continued. “And there is no current legal distinction between alcoholic or non-alcoholic additives. But, if I were advising a restaurant or beverage company, the answer is: Don’t do it at the moment.”
Worth the Wait?
Even in one of the country’s most liberal outfits, Aspen’s Little Nell, which is famed for its wild Veuve Clicquot champagne-spraying parties, isn’t taking chances: CBD is completely off the table.
“Look, cannabis in all its forms is really popular here, among skiers and athletes with arthritis, aches, pains, you name it. But, my honest opinion as a chef is: Is it really necessary to put it in the food? Just have a candy on the way home,” said Little Nell’s Executive Chef Matt Zubrod, while sitting inside the fine dining room at Element 47. “That said, I’m sure this topic will come up again before the Food & Wine Classic.” The annual festival occurs every summer, and draws the food world’s top talent and culinary trendsetters.
In states where cannabis is recreationally legal, some restaurants have an understandably unenthused take on the CBD trend. Though CBD may be socially more acceptable, the FDA can still decide to penalize restaurants for putting CBD in food and drink in these states. Besides, what’s the big novelty when you’re already in Hunter S. Thompson’s Potlandia?
“We don’t need to make it worse. Everyone is already [messed] up walking in here,” said Todd Threlkeld, the mustachioed bartender at Caribou Club, a private membership dinner and dancing club in Aspen that draws the moneyed crowd down from the slopes. He’s been working behind the “Bou” bar for 24 years.
Just a few blocks away, at the seductive underground speakeasy called Bad Harriet, manager Jessie Kneitel is holding off for different reasons.
“Is mixing CBD with alcohol safe? Yes. But I did a lot of research while we updated our cocktail menu, and the law just doesn’t seem definitive yet,” she said, while cleaning glasses and mixing stylish craft cocktails with deft precision. “I would be pushing a lot harder for it, if pot wasn’t already legal in my state.”
No Turning Back Now
Independent restaurants are small players in what is already a $10 billion business, according to New Frontier Data, a cannabis market research and data analysis firm. And CBD legislation just isn’t their call. But, alcohol industry giants like Coors Brewing Company and Anheuser Busch might have a greater influence on the outcome.
“The liquor industry wants to know the impact CBD will have on alcoholic beverages in the long term. Which states are coming on board? It’s all about turf. They’ve been here since the repeal of prohibition and they’re watching CBD sales like hawks,” said Matt Cooke, president of Cook Consulting LLC, a cannabis policy consultancy. Where money flows, lobbyists follow.
The fact is, cannabis regulation has a history of defiance. In 2012, Colorado and Washington became the first U.S. states to legalize marijuana for recreational use in defiance of federal law. Given the tendency of big business interests to get their way in Washington, it’s reasonable to assume that the policing of CBD will eventually give way to the economic upside.
Jennifer Parker is a writer and reporter based in New York City, covering culture, travel, and the travel industry. Her work frequently appears in esteemed publications such as Bloomberg Pursuits, Saveur magazine, Watch Journal, and the Washington Post.